Increasing evidence implicates dysfunction of GABAergic interneurons in a host of neuropsychological condi- tions, including autism, schizophrenia, bipolar disorder, and epilepsy. Recent success in identifying veritable genetic risk factors together with the technological and methodological advances in human induced pluripotent stem (iPS) cell-based models have rendered us a unique opportunity to develop in vitro human cellular models for mechanistic investigations. Given the diversity of GABAergic interneurons, to move from the commonplace idea that disturbed excitatory-inhibitory balance is associated with various neuropsychological conditions toward a mechanistic understanding of the contribution of different interneuron subtypes to each unique pathophysiology, it is essential to derive specific GABAergic cell types from human pluripotent stem cells (hPSCs). However, no approach to date has been effective in generating homogeneous populations of specific GABAergic subtypes. Our long-term goal is to develop and use human model systems to elucidate the molecular and cellular mecha- nisms underlying GABAergic neuron dysfunction-associated neuropsychological disorders. As parvalbumin (PV)- and somatostatin (SST)-expressing GABAergic interneurons originated from medial ganglionic eminence (MGE) are known to be affected in autism, schizophrenia, and bipolar patients, the objective here is to generate and characterize MGE-derived GABAergic neurons from human hPSCs. The central hypothesis of the current study is that using a combination of external patterning factors and key lineage-determining transcription factors, the differentiation of hPSCs can be precisely directed to produce distinct GABAergic cell types, which has been formulated on the basis of previous studies and our largely unpublished Preliminary Data. The hypothesis will be tested by pursuing two specific aims: 1) To guide human neural progenitor cell specification through sequen- tial expression of neuron origin- and subtype-restricted key factors; 2) To transcriptionally specify human MGE progenitors into GABAergic neuron subtypes. Under the first aim, we will mimic the genetic cascade that takes place during development to specify GABAergic interneuron cell fate by ectopic expression of spatial and tem- poral specific transcription factors in forebrain progenitors derived from hPSCs. Under the second aim, we will transcriptionally specify MGE progenitor cells generated using different methods through ectopic expression of PV- and SST-expressing GABAergic interneuron specific factors. A multidisciplinary approach will be used to characterize the identity, heterogeneity, maturation stage and function of neurons generated. Applied together, these aims will allow us to use previously established methods as a starting point and develop new approaches that combine extrinsic factors and intrinsic transcriptional specifications to generate specific GABAergic cell types from human PSCs. Given the high prevalence of PV- and SST-expressing GABAergic interneuron dysfunction in neuropsychological disorders, this work will provide the fundamental tool for future studies that have the po- tential to shed light on the key molecular and cellular mechanisms underlying these complex disease conditions.